Criminal Charges for Ex-Goldman Sachs Banker: Reporter’s Notebook

The Federal Reserve Bank of New York is one of Goldman Sachs’s regulators.Credit
Mark Lennihan/Associated Press

It is not every day that a banker pleads guilty to criminal charges, let alone someone from the mighty Goldman Sachs.

Much to the dismay of Wall Street’s critics, very few bankers went to prison for the 2008 financial crisis, feeding fears that Wall Street is just too big to jail.

But about two months ago, during a dinner with a confidential source, we learned that a former Goldman banker was facing criminal charges. And on Monday morning, after a long stretch of reporting and a weekend of writing, Peter Eavis and I finally published our article.

As we detailed, the banker was suspected of taking confidential documents from a source inside the Federal Reserve Bank of New York, an embarrassing leak that we first reported on last November. Soon after the leak, which gave Goldman a leg up when advising some clients, both men were fired.

In the course of trying to confirm that prosecutors were seeking guilty pleas from them both, we came across another angle that was arguably more interesting: Goldman itself would pay a $50 million fine to New York’s Department of Financial Services and take the rare step of admitting a big failure — that it did not effectively supervise the former banker.

So we had to track two separate strands of a story that spanned multiple government agencies, law firms and financial institutions. That process took weeks.

Although we flirted with the idea of publishing early this month, the case was not yet fully baked. We worried that the story would turn out to be incremental if we could not say, definitively, who was going to be charged and with what crime, and whether Goldman would pay up or fight the regulatory case.

We were also sensitive to the fact that people’s livelihoods were at stake. Both men, guilty or not, were grappling with an ordeal. Clearly a mistake had been made, but they were human, and they were young. The Goldman banker was 29 at the time of the leak. The case means that he will never work on Wall Street again, and we did not take lightly that our article would be painful for him.

When we went to publish on Monday morning, we still weren’t sure whether both men would accept the plea deal from prosecutors. But we knew that at the very least they would face charges. We also had some added motivation to publish: A rumor was spreading that one of our competitors was closing in on some of the same information.

Rather than risk the exclusive, we ran what we knew at the time. And later in the day, once we confirmed that both men accepted the plea deals, we at last updated our final article.

So, after all of this, will the case really change anything on Wall Street? It’s doubtful. These men were far from C.E.O.s, and this was not the crime of the century.

Nonetheless, it was important to capture a very rare moment when Goldman was on the ropes, and one of its former bankers was headed to court.